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Uncovering What the SECURE Act 2.0 Means for Retirement

We at SageSpring are thrilled to start the new year with exciting news that we believe may benefit many of our clients. You may have heard that on December 29, 2022, Congress signed the SECURE Act 2.0 into law. In this article, we will outline some of the key changes that can be found in this new bill. 

What is the Secure act?

The SECURE (Setting Every Community Up for Retirement Enhancement) Act was first introduced in December of 2019. While this original bill made several alterations to America’s retirement system, it was not a complete solution. With SECURE Act 2.0, many Americans may now experience a more comprehensive plan for establishing reliable retirement resources. 

In addition to reducing the retirement savings gap, SECURE 2.0 adds more than 90 new retirement plan provisions, including changes for small businesses and for those saving for retirement. 

Essentially, the new bill incentivises small business owners to offer retirement plans, encourages earlier retirement savings for individuals–in part by increasing limits for catch-up contributions, and offers more savings flexibility for individuals aged 60 and older.

What will the SECURE Act 2.0 do?

The SECURE Act 2.0 is aimed at helping working Americans meet their retirement needs. It does this in a few ways; first, by expanding access to employer retirement plans and reducing limits and barriers to creating individually functional plans, SECURE 2.0 encourages employers to help their employees begin a retirement fund. The bill also seeks to help enroll workers in retirement plans earlier in their careers, as well as help older workers accelerate their savings. Finally, SECURE 2.0 places greater consideration on guaranteeing Americans’ retirement income will be around as long as they will.

What to know about the SECURE Act 2.0? 

With so many new provisions, this bill’s entirety might seem a little daunting. We’re here to help unpack it, and we’ll continue to share information about it in the weeks and months ahead. For now, we’ve compiled a list of what we feel are SECURE 2.0’s most relevant highlights.

1. The age to start taking RMDs (Required Minimum Distributions) has increased to 73. 

Note: This change is effective as of January 1, 2023. The act also states that the age will increase to 74 in 2029, and 75  beginning in 2033.

2. Unused 529 balances may be transferred directly to a Roth IRA, if the 529 account has been open for at least 15 years. 

Example: When Mary’s son was born, she opened a 529 account to financially prepare for his education. Mary’s son received a full ride scholarship to college. Mary is now able to transfer those unused 529 savings directly to her Roth IRA. Of course, limitations apply here, so talk with your financial advisor to better understand the requirements to taking advantage of this change.

3. IRA Catch-Up Contributions will be indexed for inflation for  individuals at least 50 years of age.

Note: The current catch-up contribution limit for individuals age 50 and over is $1,000. Beginning in 2024, the limit will be indexed to inflation, meaning that the limit may rise every year based on federally determined cost-of-living increases.

4. Employers may offer small, immediate financial incentives to save for retirement. 

Example: Kelly’s employer encouraged her to begin using the company’s retirement program by offering her a gift card to her favorite store after her first retirement savings deposit.

5. Beginning in 2025, auto-enroll for new plans will be mandatory.

Example: Steven left his job in December of 2024 without a retirement savings account. When he began his new job in February of 2025, his paychecks were automatically set up to deposit funds into his retirement account.

6. The original SECURE Act’s tax incentives for small businesses have expanded. 

Example: Even with the provided tax breaks, Rebecca–who opened a small bookshop in 2020–couldn’t afford to set up a retirement plan for her few employees. Thanks to SECURE 2.0’s increased tax breaks, however, she’ll be able to set up a plan this year.

7. SEP (Simplified Employee Pension) and SIMPLE (Savings Incentive Match Plan for Employees) IRA’s may now accept Roth Contributions.

Note: This may not be fully in effect for some time, as additional guidance is needed from the IRS and employer plan documents will need to be updated.

8. Part-time workers have increased access to retirement plans.

Example: As a seasoned part-time employee at a local deli, Tyler was not eligible for a retirement plan through the restaurant. SECURE 2.0 allowed him access to his employer’s plan in 2023, and he began saving for retirement.

9. Individuals aged 60 and over have increased savings flexibility.

Example: Although Sue had been saving for retirement for years, at 59 she didn’t have enough money to retire. Luckily, she turned 60 in April of 2023, and she was able to increase how much she saved.

10. There are reduced penalties for emergency withdrawals. 

Example: In 2021, Dominique’s car stopped working and she needed to purchase a new one. Without cash for a down payment, she didn’t have a choice but to dip into her retirement fund and accept the 10% penalty. In 2024, her friend Kevin experienced a similar situation, but he was able to make a one-time emergency withdrawal from his retirement account without penalty. 

11. Programs are in place to help employees pay down their student loans.

Example: When Adriane got her first job after college in 2024, she wanted to start a retirement fund, but her most immediate need was getting out of student loan debt. Given that urgency, her employer was able to make contributions to her student loans instead of matching funds for her retirement.

What might this mean for me?

The SECURE Act 2.0 is designed to improve retirement plans for working Americans by helping reduce the retirement savings gap and expanding tax credits so that small business owners can enroll their employees in their company-run retirement plans. We hope you will benefit greatly from the new legislation, and we are here to help you understand the bill and all its complexities. In the coming weeks, we will be posting additional information that delves deeper into the bill, but in the meantime, we encourage you to connect with your financial advisor to address any questions you may have. Speak with a financial advisor.

Further Reading 

Secure 2.0 Bill 

Human Interest 

Baker Hostetler 

Principal


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Jeffrey Dobyns
Jeffrey T. Dobyns

CFP®, CLU, CHFC

President, SageSpring | Financial Advisor, RJFS 
615-861-6102

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Jeff Dobyns has enjoyed extraordinary success providing comprehensive financial planning to retirees, entrepreneurs, entertainers, and executives by taking the time to truly know his clients, understand their goals and develop and execute their ongoing, strategic, financial plans.

Jeff earned his finance degree in business administration from Ohio University and has held executive positions with financial planning firms for more than two decades. After serving as Vice President of Investments of Lykins Financial Group, CPA’s, in his hometown of Westerville, Ohio, Jeff moved to Nashville, Tennessee to found SageSpring Wealth Partners in 2002. As its President, Jeff has led SageSpring to remarkable success, holding the distinction of being one of Raymond James’ top independent contractor offices, and a member of its Chairman’s Council*, every year since 2008.

Jeff’s true calling, however, is working directly with clients, helping them plan their financial futures in a manner that aligns with their values and helps provide them with financial confidence. To help meet these goals, Jeff leads the team of Dobyns Wealth Team and also incorporates the expertise of attorneys, accountants and other professionals to provide quality financial, tax and estate planning, and ongoing asset and risk management.

As independent advisory businesses, neither SageSpring Wealth Partners nor Dobyns Wealth Team hold any assets on behalf of clients, with such custodial and brokerage services being provided by Raymond James. As a leader in wealth management, Raymond James has an exemplary reputation and today serves more than $930 billion in client assets through 8,200 financial advisors worldwide (as of 9/30/2020).

In order to meet the highest standards of professionalism and ethics in the industry, Jeff is a CERTIFIED FINANCIAL PLANNERTM practitioner**, a Chartered Life Underwriter and a Chartered Financial Consultant. Jeff is also a participant of the Dave Ramsey SmartVestor program.

Jeff’s work and personal life are both guided by his faith and the Christian principles of honesty, generosity, compassion, and integrity. Accordingly, Jeff devotes considerable time and resources to a number of causes, including serving as a board member of Men of Valor, a prison ministry and mentoring program. He is also on the advisory board of The Signatry of Middle Tennessee, which works with families to increase their charitable giving to their favorite causes. Additionally, Jeff is on the advisory board for Halftime Institute, an organization that coaches marketplace leaders to discern and engage in their life purpose. Lastly, Jeff serves on the board of the Legacy Center of Nashville, a collaboration of independent coaching resources. He is a past board member of Porter’s Call, a Nashville charity that provides free counseling for musicians and their families, and the Martha O’Bryan Center, which empowers those in poverty to transform their lives through work, education, employment, and fellowship.

Jeff and his wife, Amy, are raising their family in Brentwood where they are members of the Brentwood Baptist Church, and their children, Gracyn, Hunter, and twins Tanner and Logan, attend the Christ Presbyterian Academy. For recreation, Jeff enjoys hunting, fishing and just being outdoors.

* Membership is based on prior fiscal year production. Re-qualification is required annually.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

SmartVestor is an advertising and referral service for investing professionals (“SmartVestor Pros”) operated by The Lampo Group, LLC d/b/a Ramsey Solutions (“Ramsey Solutions”). Pursuant to an arrangement between Ramsey Solutions, SageSpring Wealth Partners and your advisor, your advisor pays Ramsey Solutions a flat monthly fee to: (a) be a SmartVestor Pro, (b) advertise services through the SmartVestor website, and (c) receive client referrals in the form of an initial introduction to interested consumers who are located in your advisor’s Pros geographic region. SageSpring Wealth Partners does not endorse and are not affiliated with Ramsey Solutions, except with respect to the arrangement described above, and neither Ramsey Solutions nor its agents are officers or employees of SageSpring Wealth Partners. Further, neither Ramsey Solutions nor its agents are authorized to provide investment advice or act in any way on behalf of SageSpring Wealth Partners, except in connection with providing your contact information to your advisor.

Ramsey Solutions’ relationship and agreement is between SageSpring Wealth Partners only. Raymond James Financial Services, Inc. is not affiliated with the solicitor arrangement between Ramsey Solutions and SageSpring Wealth Partners.

Raymond James is not affiliated with any of the organizations mentioned above.